Volume 13, Issue 5: February 1, 2011

1) Obamas Regulatory Review Wont Revive the Economy

In last weeks State of the Union speech, President Obama sketched proposals he said would help restore the countrys long-term economic growth and revive its lagging competitiveness. In an op-ed published a week earlier in the Wall Street Journal, Obama justified a new executive order that requires the federal bureaucracy to replace outmoded regulations with better ones and to streamline excessively burdensome ones. The presidents rhetoric of improving regulation and regulatory review has broad appeal, but dont get your hopes up.

As Independent Institute Senior Fellow William Shughart notes, both Clinton and Reagan ordered federal agencies to scrap any proposed rules and regulations whose costs would exceed their benefits, yet the Federal Register continued to grow and grow. (It now runs 82,590 pages long.) Moreover, federal regulations continue to exert a ferocious bite. A study by Lafayette College economists Nicole and Mark Crain, published by the Small Business Administration last September, put a price tag on regulatory mandates: $10,585 per employee for firms with fewer than 20 employees.

One reason previous attempts at regulatory review failed is that the special interests who benefit from specific regulations lobby aggressively to ensure that their favorites escape the chopping block. A similar dynamic will work to the advantage of the 195 new regulations currently in the pipelinemuch to the detriment of the U.S. economy. Federal regulations are as responsible as anything for Americas lagging competitiveness, Shughart writes. The solution is not another dose of regulatory review, but a curb of Washingtons regulatory powers.

2) New Inflation Reflects Dishonesty of Central Banks

Prices are rising throughout the world. Price inflation for consumer goods in Britain, running 3.7 percent per year, is approaching double the rate government authorities predicted. For Europe overall, prices have also risen faster than the target set by the European Central Bank. In China, consumer prices have climbed 5 percent and continue to rise. In Indonesia, prices have risen 7 percent, prompting Jakarta to cut tariffs and increase cash transfers to households in the hope of pre-empting the outbreak of riots. In the United States, growing fears of inflation have pushed up 10-year bond yieldsin a country where interest rates had long been falling or flat.

Pumping money into the economy when so much evidence of inflation is readily available is dishonest, Vargas Llosa writes. What governments, particularly in the United States and Europe, are doing is attempting to whittle down their huge debts by debasing their currencies while continuing to borrow scandalous amounts of money. They are also hypocritically using the devaluation of their currencies brought about by quantitative easing to compete internationallywhile accusing others, with good reason, of manipulating their own money to keep up their export machines.

3) Blowing Smoke over Second-Hand Smoke

In Merchants of Doubt, Naomi Oreskes and Eric Conway attempted to discredit atmospheric scientist S. Fred Singer for his claims that global warming is neither catastrophic nor mostly man-made. In a recent article for American Thinker, Singer returns the favor, focusing on their claims about secondhand smoke and lung cancer.

Oreskes and Conway blame secondhand smoke for causing lung cancer in non-smokers. One tactic they employ is to smear their opponents with accusations of fealty to the tobacco lobby. Another is to ignore or downplay scientific evidence that doesnt mesh with their preconceived opinions or policy agenda. (Here they may be following the lead of the politicized Environmental Protection Agency.) For example, they fail to come to terms with the largest, most detailed, and most transparent epidemiological study on the topicwritten by UCLA Professor James Enstrom and published May 17, 2003, in the British Medical Journal. Enstroms study found no significant statistical relationship between secondhand smoke and lung cancer, Singer writes.

More recently, a study by the World Health Organizationreported in the British medical journal Lancetput the number of lung-cancer deaths from secondhand smoke at 600 per year for the United States, Canada, and Cubaa fraction of the EPA number for U.S. deaths alone. Ignoring those studies for the sake of promoting restrictions or bans against (admittedly unhealthy) secondhand smoke reeks of scientific corruption. The corruption of science in a worthy cause is still corruption, Singer concludes.

4) Hezbollah in Lebanon

Nijib Miqati was not Hezbollahs first choice to be Lebanons new prime minister. His return to that office, a development the militant Islamist organization backed, offers important lessons for Israel and the United States, according to Ivan Eland, senior fellow at the Independent Institute and director of the Center on Peace & Liberty.

One of Hezbollahs highest priorities in Lebanon may be to hinder the United Nations. (A U.N. tribunal seeks to indict members of Hezbollah for their alleged role in the assassination of former Prime Minister Rafik Hariri.) However, Hezbollah leader Hassan Nasrallah said his organization would respect state institutions of Lebanon and work toward a partnership government. Its support for the moderate Miqati, who called himself a consensus candidate, seems consistent with that pledge. Thus, although Hezbollahs rise as a powerbroker in Lebanon may be bad for the country, Miqatis return to power need not merit a hysterical reaction.

If that lesson has tactical implications for Israel and the United States, another lesson has strategic implications. Hezbollahs rise in Lebanon, Eland argues, stems largely from popular backlashes and political opportunities resulting from Israeli and U.S. foreign policies, including Israels 1982 invasion of Lebanon and the U.S. invasion of Iraq, which emboldened Hezbollahs patronsIran and Syria. Hezbollah may be militant, but the groups interest are local in Lebanon, and it poses little threat to U.S. security if left alone, Eland concludes.